President Obama and a cadre of Senators led by Senators McConnell and Reid have a tentative two year deal on the extension of the Bush income tax cuts and changes to the estate tax. Although many prognosticators think the bill will pass, the House Democrats are miffed and have threatened to kill the bill (at least this year). Senator Sanders has been a very vocal voice in opposition as well with his good ole fashion filibuster here:
The key provisions of the bill are:
- A $5,000,000 “portable” estate tax exemption;
- 5,000,000 gift and GST tax exemptions;
- A top 35% rate; and,
- A technical “cleanup” involving a number of questions about EGTRRA and the sunset provision.
If the house goes along, some questions come to mind:
- What happens after two years – $1,000,000 exemption and 55% top rate?
- Will the exemptions remain portable, i.e., that a surviving spouse can tack and use the unused exemption of the first spouse to die provided an estate tax return is filed on the first spouse’s death to secure the unused exemption?
- Are the gift and GST exemptions “portable?”
- What will happen to the gift tax exemption – does it stay coupled with the estate tax exemption after two years?
We should know what is going to happen in the next few days.
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